On-chain analyst: Multicoin is suspected of closing its AAVE positions at a stop-loss, with losses of over $40.56 million

On May 15, on-chain analyst Yujin monitored that Multicoin Capital was suspected of executing a stop-loss on its AAVE position—transferring 150k AAVE (14.91 million Dollars) into Galaxy Digital and BitGo, and then distributing and transferring it to CEXs such as Binance, OKX, Coinbase, and Bybit. The behavior was assessed as a selling action.

Multicoin Capital On-Chain Data: Transfer Path and Position Calculation

(Source: Arkham)

Based on Yujin’s on-chain monitoring, the suspected stop-loss capital flows and position data are as follows:

Transfer path: Multicoin Capital → Galaxy Digital and BitGo → exchanges such as Binance, OKX, Coinbase, Bybit

Cumulative time and average price: November 2024, $219 per AAVE

Original total position: 338k AAVE

This selling amount: 150k AAVE (about $14.91 million, equivalent to about $99.4 per AAVE)

Estimated loss: over $40.56 million (loss rate approximately -55%)

Remaining position: about 188k AAVE (still showing an unrealized loss)

Aave Court Case: Confirmed Timeline and Six Pending Legal Issues

After presiding over a motion related to freezing about $71 million worth of ETH in the Aave case, U.S. District Court Judge Margaret M. Garnett for the Southern District of New York confirmed the following procedural arrangements:

Confirmed timeline: deadline for supplemental statements is May 22, 2026; hearing is June 5, 2026.

The court requires supplemental explanations on six legal issues:

· Under New York state law, whether the “principle of shelter” applies to this case

· The legal distinction between fraud and larceny, and the legal interests of the hacker in stolen assets

· Which legal jurisdiction’s creditors have priority over the frozen assets

· Whether a constructive trust is an appropriate legal remedy

· Whether Aave or Arbitrum can identify specific victims to enable proportional compensation

· How the freezing action interacts with the existing regulatory framework

Background of the dispute: Gerstein Harrow LLP represents its clients as arguing that they have ownership of the relevant assets; Aave argues that allowing the unfreezing is crucial to prevent forced liquidation and turbulence in the DeFi market.

Aave Bug Bounty Program Update (May 14)

On May 14, Aave confirmed adjustments to its bug bounty program: Aave V4 and Core Aave V3 will each establish separate bug bounty programs, aiming to more precisely match the risk profiles of each component; the reward caps for key bug fixes in Aave V4 and Core Aave V3 have been increased by five times compared with earlier.

FAQ

After this suspected stop-loss by Multicoin Capital, what is the status of the remaining AAVE holdings?

After selling 150k AAVE, Multicoin Capital still holds about 188k AAVE based on its calculations (original cumulative amount of 338k minus the 150k sold this time). Using the original average price of $219 and the current price of about $99, the remaining position is also in an unrealized loss state of about -55%. Multicoin Capital has not issued an official statement regarding this action.

Why did the New York court delay the ruling on Aave’s unfreezing application?

Judge Garnett stated that Aave’s earlier filings were insufficient to explain how continuing to enforce the restraining order would lead to cumulative losses for users’ funds, and identified six legal issues that need to be supplemented. The court believes the case facts are complex and could cause near-term harm to Aave and its users; therefore, it required all parties to submit supplemental statements by May 22 and hold a hearing on June 5.

What is the current progress of Kelp DAO’s asset recovery plan?

According to announcements from Kelp DAO and Aave, the attacker’s rsETH on Arbitrum has completed destruction. About $278 million in loss tokens are expected to be recovered from the Aave Recovery Guardian multisig wallet within about two weeks; once the smart contract is reactivated, rsETH functionality will return to normal. The rsETH cross-chain bridge function was restored earlier.